November 10, 2010 / 5:52 PM / in 7 years

UPDATE 2-Great-West Lifeco profit falls on charge

* Operating EPS C$0.51 vs est C$0.48

* Insurer takes C$225 mln charge related to lawsuit

* Stock retreats 2.4 percent

(Adds details, updates shares to close) TORONTO, Nov 10 (Reuters) - Great-West Lifeco GWO.TO, Canada’s No. 2 insurer, said on Wednesday its third-quarter profit fell 38 percent as it took a C$225 million provision related to a class-action lawsuit.

Shares of the Winnipeg-based company, which have risen steadily since the end September, retraced some of those gains on the result.

Great-West earned a net C$275 million, or 29 Canadian cents a share, down from C$445 million, or 47 Canadian cents a share, in the year-before period.

Operating profit rose to C$479 million, or 51 Canadian cents a share, Great-West said.

Analysts, on average, had expected earnings of 48 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Premiums and deposits rose to C$14.4 billion from C$13.6 billion a year earlier.

An Ontario Superior Court said in an Oct. 1 decision that the company must pay C$456 million for breaches of the Insurance Companies Act in financing the 1997 takeover of London Insurance Group, the parent of London Life.

Great-West said it has appealed the ruling and established an incremental provision of C$225 million in the third quarter.

The company sells insurance and investment products under the Great-West, Canada Life, London Life and Putnam Investments banners. It is 72 percent owned by Montreal holding company Power Financial PWF.TO, which is controlled by Montreal’s Desmarais family.

Rivals Manulife Financial MFC.TO and Sun Life Financial SLF.TO each reported better than expected earnings last week.

Great-West stock fell 2.4 percent, or 65 Canadian cents, to C$26.41 on the Toronto Stock Exchange. ($1=$1.00 Canadian) (Reporting by Cameron French; editing by Janet Guttsman)

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